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Former White House AI and cryptocurrency czar David Sacks argued Friday that the U.S. is “tying itself in knots” over AI and risking its competitive edge, following the release of a new Chinese model.
Kimi K3, a new model from the Chinese startup Moonshot AI, sent shockwaves through the American AI industry Thursday after its developers claimed it could perform on par with Anthropic and OpenAI’s leading models.
The AI evaluator Arena also bumped Kimi to the top of its rankings for front-end coding, prompting Sacks to describe the development as “concerning.”
“Meanwhile America is tying itself in knots: politicians and bureaucrats are banning new data centers, piling on state regulations, and pushing for new federal agencies to pre-approve frontier models,” the venture capitalist wrote in a post on social platform X.
“This is how you lose the AI race,” he continued. “The rest of the world won’t play by our rules if we bog ourselves down. Permissionless innovation is how America won the internet and became the technological envy of the world. We can do it again with AI — while addressing risks in a targeted way — or we’ll watch our lead evaporate.”
Sacks, who announced his departure from the White House in late March, notably appeared to take aim at the Trump administration’s recent approach to AI regulation.
In the face of new, more powerful models, the White House has struggled to balance its avowed commitment to unhampered innovation with growing cybersecurity concerns.
President Trump signed an order in early June to create a voluntary testing framework in which AI companies could share their models with the government up to 30 days before releasing them publicly. It marked a scaled-back version of an order that Sacks reportedly opposed.
However, following the release of Anthropic’s new Fable and Mythos models last month, the administration hit the company with an export control order, prompting the firm to pull both models. The White House ultimately lifted the restrictions in late June.
OpenAI separately announced it would first roll out its new GPT-5.6 model to a limited group of partners at the request of the government. It publicly released the model several weeks later in July.
The White House emphasized at the time that it did not give the company a “green light” approval to release its models and that “no such permission is required or granted.”
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